Fee at 18,000 new cash machines

THE creeping advance of hole-in-the-wall charges took a giant leap forward when it emerged that 18,000 new cash machines will make customers pay to draw out their own money.

They will be placed in pubs, off-licences and convenience stores by the Cashbox company, which is raising £20m in the City to finance the scheme.

This will take the total number of ATMs in Britain to 70,000 - of which 39,000 will impose a fee. The plans will heighten fears of MPs and consumer groups that free machines are being pushed out.

Providers of free cashpoints, such as the Nationwide, say firms which charge are outbidding them when it comes to installing new outlets or renewing existing contracts. As a result, the number of free machines away from bank branches fell by 500 in the past year.

Cashbox is not alone in driving the advance of charging machines. Other operators, such as Cardpoint and Hanco, also have aggressive expansion plans. At the same time, major banks such as Halifax Bank of Scotland have raised millions of pounds by selling previously free machines to operators that are imposing charges.

A recent report from MPs on the Treasury Select Committee sounded the alarm over the threat to the network of free machines. It pointed out that Britons are already paying £140m a year in charges. The number of fee- charging machines has grown from virtually none to 21,000 over the last four years.

The operators themselves argue that they are providing a service, in the shape of convenient access to cash, for which they are entitled to charge a fee. They insist customers know about the charges and are willing to pay.

The 21,000 figure equates to 61% of all machines in so-called remote locations - away from the bank branches. However, if Cashbox gets another 18,000, this could increase to 75%. There is also evidence that operators are keen to drive up charges from the current average of £1.50 to £1.75.

Cashbox was founded by former executives of Hanco, the UK's biggest charging cash machine operator, which was bought by Royal Bank of Scotland-NatWest for £80m last year. The company, which currently has only 1,000 ATMs (Automatic Teller Machines), said it will install the further 18,000 over four years.

It already has deals with the off-licence chain Threshers and pub groups Belhaven and Greene King, and claims that half of Britain's 60,000 pubs could have a cash machine within a few years.

This is a trend which alarms some MPs because people who have been drinking are less wary when they take money out and could become a target for thieves. Typically, Cashbox sells the machines to the retailer, which is responsible for filling them with cash.

Every time someone takes money out, a message goes to his bank, which reimburses the retailer. A fee of around £1.50 is charged, most of which goes to the retailer with a small amount going to the Link system and about 35p to Cashbox, which maintains and services the machines.

One member of the Treasury Committee, Labour MP Angela Eagle, said: 'There are worries that there is a stealthy, slippery slope towards ATMs charging. How can the dynamics of this market be stopped so that we don't wake up one morning and discover that consumers have to pay to access their own money? It seems there is a possibility that, within a short period, we might lose free access to cash completely.'